Budget Estimates: Housing ministry continues to fail the most insecurely housed British Columbians

May 1, 2024 | 42-5, Blog, Estimates, Governance, Legislature, Video | 0 comments

I continue to be extremely concerned for the most insecurely housed people in British Columbia. While the provincial government has been aggressively making changes to zoning, the volume of non-market housing being constructed and securing the deeply affordable rental units.

In budget estimates with Minister Ravi Kahlon and I discuss a variety of issues such as: where are displaced renters from deeply affordable housing going to go? No answer. What is the Minister’s plan for dealing with workforce housing on the Southern Gulf Islands? No answer. How is the Minister addressing the impact of the Real Estate Investment Trusts who are buying up rental housing and new condos? No answer. How is the urban tree canopy going to be protected? Only a vague answer. Why are the promises of 24/7 staffing at BC Housing projects not staffed as expected? Minister will look into this.

I think this dialogue demonstrates that there will be tens of thousands of British Columbians (who can barely afford their current rent) displaced by redevelopment who will be forced into market housing that will be far out of reach.

[Transcript]

Deputy Speaker: Recognizing the House Leader of the Third Party.

A. Olsen: Minister?

Interjections.

A. Olsen: Okay. I agree with your comments, by the way.
I disagree with the comments from the member who spoke before me — or, at least, the hockey team. Anyway, we’ll leave that for another place.

Interjections.

A. Olsen: There have been articles written about it. Yeah. Go for it. Just google it.
Now back to the business here about housing, very important business about housing.
The minister earlier talked about the tree canopy. I’m just wondering if there can be some clarity. This was in a question directed by the official opposition’s Housing critic just around green space being preserved elsewhere. The places where we’ve developed are where the housing is going to go.

While I recognize that densification need happen, there are actions that this government could take and that local governments do take — or were able to take previously — to be able to protect the urban tree canopy. In fact, there are many initiatives, as the member talked about, and residential neighbourhoods and community groups that work very hard to ensure that there is a tree canopy within their communities.

As we saw in the heat dome…. Indeed, that tree canopy was the only place that many residents were able to get refuge. We don’t have the standards within our building code that require air conditioning in every unit, as an example.

I’m just wondering if the minister can maybe respond to this. It seemed like there was a position taken…. The urban tree canopy is at threat. Basically, it was…. The effort is to preserve green space elsewhere.
I’m wondering if maybe the minister wants to reflect on whether or not there will be any measures put in place, from the densification project last fall, that protect the urban tree canopy in the areas that are already developed, if there are any measures to encourage development to happen adjacent to that tree canopy, etc.

[4:50 p.m.]

Hon. R. Kahlon: I had answered to my critic from the official opposition that the reason why the amenity cost charge is important, the tool, was that it would provide a means for local governments to be able to collect dollars to build parks and to build green space. So that’s what I was referring to in my answer to the member.

Now, there is flexibility in the small-scale, multi-unit legislation for local governments to make some adjustments, but they can’t be unreasonable. We know in some local governments, they want to protect a tree. They want to adjust the setbacks in order to have the housing being built. That flexibility is there, but it can’t be seen as unreasonable in the measures that they’re taking.

A. Olsen: I guess I just want to draw the distinction, and perhaps my colleague was wanting to draw the distinction between building new parks and planting new trees and the fully old trees, the actual cover that an old tree provides that a young tree won’t be able to provide for at least 60, 70, 80 years, in some cases. The clarity in this…. I appreciate the minister, I think, drawing more clarity in the response, that there is space for trees to be protected as long as it’s not unreasonable. I guess my fear is the default. The default is towards the housing being built on the property.

To what extent can local governments…? I guess a little bit more clarity on how the ministry will see unreasonable behaviour of local governments and just where that line is. I hope the minister accepts that the push here is to really understand, because this tree canopy is critical for the health and well-being of our communities.

[4:55 p.m.]

Hon. R. Kahlon: It’s important that the way the communities go about the work they’re doing is through the site standards document. There was a lot of attention paid to the site standards document. I can share with the member that we brought in a lot of experts in this space.

In fact, a gentleman, Mark Holland, who is…. He’s won awards. He was named B.C. Planner of the Year. He is a Queen Diamond Jubilee winner because of his work around sustainability and sustainable building. He’s from Vancouver Island University. We brought in professionals like that that helped us create the site standards document, so we can address all the nuances that come with planning and ensuring that we have sustainable communities.

The site standards document is the guiding document that we’ve given to communities that has the flexibility in there for them to be able to make the decisions on the ground.

A. Olsen: I appreciate that. I thank the minister for the further information. As we’ve asked these questions, I think that it’s important for community groups to understand that there are built-in mechanisms that local governments can look at and utilize for a potential threat to the tree canopy.
I’m going to switch gears here a little bit just to real estate investors, real estate investment trusts and, specifically, with respect to what it is that the provincial government is doing to insulate ourselves and our housing from the huge investment power that real estate investment trusts have.

According to data released by the Bank of Canada, investors were responsible for 30 percent of home purchases in the first three months this year, up from 28 percent in the first quarter of last year and 22 percent in the same period of 2020. Investors also acquired 49 percent of condos that have been completed over the past five years. It’s nearly 50 percent, nearly half.

So what is the ministry doing to combat investors, specifically the real estate investment trusts, from buying up market housing before first-time homebuyers are able to get their foot the door?

Hon. R. Kahlon: It’s a fantastic topic, an important topic. I’ll start with the rental protection fund. As the member will know, the rental protection fund has started to acquire purpose-built buildings.

In Langley, a few weeks ago, we purchased two purpose-built rental buildings from REITs. What was fascinating in that purchase by the rental protection fund was a conversation that some of the members from the rental protection fund and I were having with the CEO of this major REIT that flew in from Ontario for this. He made it clear that their interest was no longer going to be in buying older buildings in British Columbia.

Now, some would argue it’s because tenants, advocacy groups and others have made it really challenging for them to be able to do what some had been doing, where they were coming in, displacing people. I would also say that, perhaps, the rules that we’ve put in place to ensure that people just can’t be evicted anymore have made it more challenging for that model to work in British Columbia.

But what was made clear to us at that point was that they were interested in British Columbia, but it was investing in new purpose-built rentals. So they were shifting their model in British Columbia to building more purpose-built rentals as opposed to getting into the space of older rental buildings.

So I would say that better protections for tenants have discouraged that type of investment of buying older buildings, doing some minor fix-ups and displacing people. But also, having an entity like the rental protection fund, which is able to go in and purchase these older buildings, has also helped us to be able to retain these units, protect the tenants, but also, grow the non-market space at the same time.

A. Olsen: I think that the experience that we’re seeing, at least, in parts of my riding, is that the real estate investment trusts are coming in. They are building new buildings, and they’re being celebrated. The rental units are being celebrated, but they’re also being marketed as luxury rentals.

[5:00 p.m.]

The challenges that have been raised by the Saanich Peninsula Chamber of Commerce, for an example, with respect to workforce housing: those units that are being built on the Saanich Peninsula are not being marketed to the workforce housing needs on the Saanich Peninsula. They are being marketed to an out-of-province market or a luxury rental market.

So we’ve got a scenario where it is true that they are also in the building of new buildings. They also have bought up, as I pointed out, a huge number of units already and are also starting to buy a huge number of condo units as well.

The Perspectives Journal: “The fact that investors are buying up such a large share of recently built housing… raises serious doubts about the extent to which policies focused on spurring market-rate housing supply can be expected to make that housing “attainable.”

“In the absence of major policy changes, the evidence suggests that much of the housing will ultimately be attained by wealthy Canadians trying to grow portfolios, rather than ordinary Canadians trying to buy a home” or the real estate investment trusts.

Are there any policy measures, other than the anecdotal evidence that the minister gave, that the government is willing to put into place to ensure that new product that is being built in the market is going to be attainable by people and not by real estate investment trusts?

Hon. R. Kahlon: I can’t speak to the specific project in the member’s riding. I will comment that he lives in one of the more beautiful ridings in the province, if not the country, so it may be that some purpose-built rentals are being built and being marketed as luxury. It’s difficult to control the private sector when they want to build housing and market it to different audiences.

What I would say is that we do need an increase in purpose-built rentals, and it’s not going to be necessarily individuals that are investing in that. It’s going to be either investment companies or not-for-profits.

[S. Chandra Herbert in the chair.]

We believe that we need to grow the non-market space. That’s why we have the rental protection fund to acquire. That’s why we’re making the investments to expand. BC Builds is part of that solution as well, the ability to use government-owned lands — federal, provincial, local government and First Nations lands — to be able to build housing that targets that middle-income family group that needs that housing. I think BC Builds is the reason why it’s gone from B.C. now across the country, a meeting with Housing ministers from different provinces in the coming days to talk about how we’re doing it.

Not only do we need to hit that market…. The private sector can’t reach it. Even our not-for-profits struggle without governments being involved. So not only is it important for that reason, it’s also important because with interest rates and global inflation, there are some developments that are not going forward. It’s just a challenging time, and we’re able to capture the availability of a labour pool to build these projects.

It’s a good opportunity for First Nations, good opportunity for local government. So that’s another initiative.

If the member is asking if we’re bringing policies to discourage purpose-built rentals from being built by the private sector, we’re not, because purpose-built rentals are purpose-built rentals. We need to increase that supply throughout the region.

That’s why the federal government’s taken the steps they’ve taken as well, removing GST for the next three years. There are a whole host of measures that they’re making, as well, to encourage that type.
So we’re supporting not-for-profits to get in that space. We’re using our resources, and we need the private sector to continue to build those purpose-built rentals as well.

A. Olsen: What I’m asking the minister is what measures are being taken to limit or to contain the financialization of those units by large, powerful investment vehicles that are primarily built for the profiteering off of housing rather than for the affordability of housing? What measures are being taken to contain those large investment vehicles from their ability to turn housing from a need that people have and availability at an unattainable rate and contain the profits of these real estate investment trusts?

[5:05 p.m.]

Hon. R. Kahlon: I’m trying to understand where the member is going with this, so I’ll just say that we are trying to encourage both not-for-profits and for-profit homebuilders to build purpose-built rentals. We’re trying to encourage that. Whether it’s an investment company or whether it’s a local investor, we’re trying to encourage purpose-built rentals to be built. We’re not trying to discourage it.

A. Olsen: We’ve heard from people who are in the rental market that the rental market…. The cost of market rent is unsustainable for people. What is the government doing to address the gap between the incomes that people are making in our communities and the cost of market rent, specifically in Victoria and Vancouver, but across the province?

Hon. R. Kahlon: We’re trying to expand non-market housing because we know non-market housing over time has shown to be more affordable than for-profit. We’re acquiring buildings that go on sale to shift into the non-market space and protect renters at the same time. We’re trying to increase the availability of housing over time. We’re providing supports to renters.

We’re doing a whole host of measures, but we have more people than housing right now, and that’s the challenge we’re dealing with. The debate about private sector purpose-built rentals and a not-for-profit…. Which is better is a debate that you can have when you have a luxury of a lot of housing availability. We don’t have a lot of housing availability right now, so we need to encourage the increase in housing supply of purpose-built rentals in communities throughout the province.

A. Olsen: That’s a debate the minister is having with himself. That is not the line of questioning that I am having. I am not having a debate between purpose-built and non-market. I’m asking about how it is that we are dealing with the urgent need that British Columbian renters have, more than 1.5 million renters who are today and tomorrow and at the end of the month dealing with a rental market that is far outpacing the local wages. I have heard the minister’s responses, but the reality is that the gap is today, not sometime in the future. I was asking what policy measures are being taken.

The minister has now mentioned the rental protection fund a couple of times. There was a building in Sidney that was brought to the minister’s attention last year — deeply affordable rental units. We raised this issue that this building was for sale. The rental protection fund was being announced. It was very exciting that this building could be protected, and now this building has not been. Why is it that this building that has been…?

If this is the solution, why do we now have a situation where the minister highlights Sidney as being on the list of next ten communities that are going to have to deliver housing for their residents, yet it’s been brought to the ministry’s attention that here’s a potential place to save deeply affordable…? There is no place for these residents to go from here, so they’re going to be displaced. The building has now been sold. The opportunity was missed.

Here’s the incongruency. The minister responds that the rental protection fund…. Why did the rental protection fund fail the residents in deeply affordable housing in Sidney?

Hon. R. Kahlon: I’m sure the member knows this, but the rental protection fund is outside of government. I’m sure the member knows this, but if he doesn’t, I’m happy to share that information.

If the member has concerns about why this building wasn’t purchased, he should go to the Aboriginal Housing Management Association, the B.C. Non-Profit Housing Association, the co-op association who run the rental protection fund and ask them why that acquisition wasn’t made. We trust our partners in British Columbia. That’s why the entity was created. That’s why we provided them the dollars. He may be able to get a better answer of why it didn’t work in that case through them.

So how do we address the challenge? This is the central question that we grapple with. We encourage and we put measures in place that encourage more housing supply, purpose-built rentals. We know that’s a measure that will help — both not-for-profit or other. Not put in policies that will discourage it, but put in policies that will encourage more opportunities there.

[5:10 p.m.]

We’ve got caps on rents in British Columbia. We’ve got things like speculation and vacancy tax. People are investing in homes and leaving them empty. We’re saying,: “No, we need that housing back.” We’re taking action when it comes to short-term rentals and saying: “We need that housing available for renters in British Columbia.”

There’s a whole host of measures we’re taking to try to address this challenge, but fundamentally, we have more people than housing available. It’s going to take time, but all the measures we’ve brought forward are to address this very question.

A. Olsen: I appreciate that the fund and the decisions are being made elsewhere. The minister has used the rental protection fund, several times now, as a way to respond to the issue that we’re facing: deeply unaffordable housing, specifically for certain demographics who simply cannot afford to have their rents go up at all or to be displaced at all.

As I said in my housing speeches earlier in this session, we are facing a large displacement, from the housing policies that have happened. There will be a massive displacement of people who can ill afford to have their rent go up $1. They can’t afford the rent that is existing in their communities today, never mind to be displaced. We have this situation where it feels like the minister wants to have it both ways.

He wants to point to the rental protection fund as the solution to protecting the deeply affordable housing.

The market is going to be solving the problem by building more units, but as I pointed out, in my riding — the minister is right; it’s a very nice riding — because we don’t have those projects being built, where there are the non-market solutions that the minister also points to, those deeply affordable units that the rental protection fund would have been primed to save are going to go on the market as market rentals, above the price that people can afford.

The minister wants to have it both ways. He wants to say that the government has put this fund in place to save people from being displaced from their housing, yet when asked the question why it is that this fund failed to do that, it’s now somebody else’s decision point, somebody else’s problem.

In an environment where we’ve got $500 million set aside for the rental protection fund and these massively capitalized real estate investment trusts building luxury market rentals, I’ll agree with the minister. We need market rentals. We need as many rentals as we can — except that the residents in my riding that will be displaced from this have nowhere to go. Where do they go, Minister?

Hon. R. Kahlon: I don’t understand why the rental protection fund, in the member’s view, can’t be part of the solution. We’re not saying it’s the entirety of the solution, but we’re saying it’s an important part of the solution. If he feels discouraged about it, he should talk to the people who have seen the fund already work, the people that were saved in Coquitlam, the people who were saved in Esquimalt, the women that I was talking to in Langley when their building was saved.

It doesn’t solve the problem of every single renter, but it solves the issues for some that are under distress, and it’s an important fund for that reason. It’s not only we that think it’s a good idea. The federal government just said, “Hey, we like that idea. We’re putting $2 billion towards it as well,” which expands the opportunity for us here in British Columbia.

What we need, along with all the measures that I’ve highlighted, is the increase in non-market housing and the increase in market housing, both at the same time. I’m not entirely sure of what I’m really debating with the member about, because it’s not really clear in his question.

What I thought I heard was: “What measures are you taking to make life easier for renters?” What I’m saying is that everything we’ve been doing is about getting more housing available, non-market expansion, supporting private sector housing to be built and protecting older rental stock. There are so many measures.

I appreciate that housing isn’t something that’s a switch, where you can flick the switch, and then it solves itself. It’s something that does take time.

[5:15 p.m.]

We’re putting better protections in for renters, protection around personal-use evictions, protections against renovictions, and just today, we announced better protections for those that are in manufactured home parks — all things that were recommended by a rental task force, which the member was part of.
All these things combined are moving this thing forward, but if the member is asking me if one initiative will solve the entire housing crisis, I’ve said, on many occasions, that one won’t. All of them, together, move us in the direction that we desperately need to go as a province.

A. Olsen: No. I’m not suggesting that one measure is going to solve the problem at all. In fact, I’m arguing the opposite of that.

I asked the minister where the people who are displaced from the deeply affordable housing that will be knocked down…? New buildings will be put up that will end up being either market rental or market purchase. Where will the seniors — who are being displaced from that building, who can barely afford their rent now, and will be now pushed out and displaced from that — go? Where is their next place to find a home that they can…?

I’m just suggesting that the minister has put the rental protection fund…. And I think that actually the federal government invested $2 billion in BC Builds, not the rental protection fund, which I….
But either way, the question remains, where are my constituents, who are displaced from the housing market that the minister has been relying heavily on…? Where do they go from here?

Hon. R. Kahlon: I just want to clarify that the federal government has also put money towards the rental protection fund: not directly to our fund, but to a fund that will support our rental protection fund. It’s also $2 billion.

And what I would say to the member is that’s why we’ve opened 137 affordable rentals in Sidney. This is why we’ve opened 132 affordable rental units in Central Saanich. This is why we’re making the investments we’re making, whether it’s through the community housing fund, in which we just announced another round, whether it’s the Indigenous housing fund, which is closing May 15. We’re providing PDF funding for Indigenous-led projects so that they can do the work in advance.

Again, I feel like we’re spinning our wheels here. It’s certainly a challenging time, but that’s why we’re increasing protections for renters through the RTB changes there. That’s why we’re increasing non-market housing, bringing some in, building some up. That’s why we’re encouraging the private sector. Everyone will have a role. The private sector will meet the need for some parts of our population. The not-for-profits, through the funding from B.C. Housing, hit certain demographics. The initiative of BC Builds hits a different demographic. We’re trying to increase housing in all of those markets at the same time.

A. Olsen: We may, in here, be spinning our wheels on these issues. The constituents that I’ve talked to that are about to be displaced, their heads are spinning because they don’t see where they will land. The units, that the minister talked about, are in no way equal to in terms of the cost to live in them. They are far, far higher than the deeply affordable units that people are being displaced from.

So to simply say that there are affordable units…. We could spend the rest of my time talking about what the government’s definition of “affordable” is. But the market, right now, is deeply unaffordable for the vast majority of people who are renting in it or who are trying to purchase in it.

I have to switch gears here, as I’ve only got a couple of minutes left, and just ask some questions about…. I’ve asked the minister in a couple of different ways over the last little bit about what the plan is for the southern Gulf Islands. I’ve talked about workforce housing issues. The Saanich Peninsula Chamber of Commerce has got a fairly robust campaign, right now, on dealing with the fact that the businesses on the Saanich Peninsula….

[5:20 p.m.]

The volume of housing that’s being built is not, as they put it, meeting the immediate needs of the community. To even, I think, probably a more magnified extent, the type of housing that is being made available on the southern Gulf Islands is also having a similar impact on the workforces there.

The minister and I have talked a lot about the Islands Trust Act, a lot about the rural communities. I think that we both understand the deep challenges that are there from a governance perspective, in terms of being able to provide housing for people, but the communities there need to have solutions that fit the community.

How is the minister going to be working to solve…? It’s all scale and scope. It’s a smaller scale on the southern Gulf Islands, but the scope of the problem is magnified because a few people on the southern Gulf Islands is equivalent to many thousands of people in more urban areas.

Part of the challenge is that B.C. Housing and the ministry don’t do small numbers very well. They like to do large numbers. The CRD likes to build large numbers. What is the solution for communities — specifically the southern Gulf Islands, but communities like the southern Gulf Islands?

Hon. R. Kahlon: I do appreciate the member coming to me multiple times to talk about the housing challenges in this community. I think we’ve had some good conversations about that, I would say, since he’s mentioned all three different parts of his community.

I’ll start with the fact that with the recent housing targets announcement, the inclusion of Sidney and North Saanich to be part of that, I think, is important. North Saanich, I would say respectfully, has not allowed enough housing in the community to be part in playing a role to support the challenges we’re dealing with. I’ve said that on multiple occasions.

I’m hoping, through this, that they will understand that they need to support it. Companies like Viking Air and all these companies that are there that pay good-paying jobs…. Even with the good-paying jobs, they can’t attract people because they don’t want to be commuting from Mill Bay or from wherever they have to come from.

It’s a real challenge. I worry that we will lose some very strong companies to other jurisdictions because they don’t have the housing locally to support the workforce that they need. I’m actually really worried about that. I started this conversation with the local chambers when I was the Minister of Jobs, Economic Recovery and Innovation, so it’s timely that it carries over here.

Sidney’s part of that as well, and I am confident that Sidney will continue to play an important role in the housing discussion. The challenges of Salt Spring are real. I will say to the member that I wouldn’t necessarily agree with his characterization that B.C. Housing doesn’t do smaller projects.

[5:25 p.m.]

I was sharing earlier that we just did, I think, ten units in Kaslo. We’ve just opened up 14 in Valemount. It just does vary, community to community. We did Paisley Place, 24 units on Gabriola.

The Gulf Islands can apply for CHF funding. That is available to them, if partners were able to find a good parcel of land to do that.

The other thing I’ll add is…. If these local governments identify lands that they have and that they want workforce housing, there is the opportunity with BC Builds for them to come forward. Some good strong local First Nations partners, I think, are a good opportunity, as well, through the Indigenous housing fund.

For some community organizations that struggle because they don’t have the resources to do the work to prepare for an application…. It’s a good time now to partner with First Nations communities. We provide PDF funding, project development funding, for projects if they’re partnering with First Nations or Indigenous partners. So you can get money to do the pre-planning work, which enables you to be able to apply for the housing.

We’re trying to find creative solutions. I know the member and I have talked about trying to find creative solutions for his community. We’re working on a few other initiatives that I can’t speak about now — we’ve not finalized them yet — which will help us get housing into smaller and, maybe, more rural parts of our communities in easier ways.

A. Olsen: The minister is right. We’ve got a 32 or 34-something unit building at Drake Road on Salt Spring, which is an example of a smaller building.

I do acknowledge that there are…. Perhaps I should have characterized it…. There are, especially on Gulf Island communities, unique circumstances that may require B.C. Housing to think outside of what the model is or the formula that B.C. Housing uses in order to determine what a viable project is. What’s a viable project in the capital regional district…. Even though Salt Spring and Mayne and Galiano….

We’ve got a situation on Galiano. We’ve had multiple local community groups working tirelessly to try to get a few units built. They’ve got everything, but now they have to build a road.

The affordability of these projects is very, very challenging. Even as experienced as local community groups get building housing, it’s very, very challenging. They’re not professional developers.

I just want to continue to use every space that I have here to acknowledge the challenge that’s faced, even for just a small number of units, on Pender Island, Galiano, Mayne, Saturna, Salt Spring. It means a big deal for the communities in order to be able to get that.

I’ll just ask one final question before I hand it over to my colleague here. It’s around the staffing of buildings.

One of the concerns that I’ve consistently heard was…. The commitment that was made by B.C. Housing and in the contracts to fully staff sites at Kings Lane, for example, and at Prosser Road in Central Saanich…. The level of staffing commitments that were made to the communities…. They were going to be fully staffed 24/7. That’s just simply not the case at those two sites specifically.

Can the minister talk to why it’s acceptable for the ministry to claim that there are going to be fully staffed buildings and then for those buildings to not be staffed to the levels that the ministry made the commitment to?

[5:30 p.m.]

Hon. R. Kahlon: Part of the operating agreement with the not-for-profit partners and the funding that goes to them is with the commitment that they have two staff, two FTEs, 24-7. Usually that’s six to eight staff that they need for that.

If the member is suggesting that he has information that our not-for-profit partners in those two sites are not providing that service, then that’s something that we’ll follow up with through B.C. Housing, and I’ll get back to the member on it.

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